Citigroup Joins Banks to Cap Stablecoin Yields After 20% Circle Stock Plunge
U.S. commercial banks including Citigroup lobbied to ban yield payments on stablecoin deposits, triggering a 20% plunge in Circle’s USDC issuer stock and raising regulatory hurdles for crypto rewards. At the same time, bank-stock ETFs have rallied sharply, outperforming the S&P 500 this month.
1. Lobbying Effort to Limit Stablecoin Yields
U.S. commercial banks including Citigroup and JPMorgan Chase are backing draft legislation to ban yield payments on stablecoin deposits and restrict rewards mechanisms on crypto exchanges. This lobbying effort contributed to a 20% drop in the stock of Circle’s USDC issuer and could curtail future crypto-linked revenue streams for financial institutions.
2. Bank-Stock ETFs Surge
Bank-stock ETFs have outpaced the broader market this month, outperforming the S&P 500 as investors rotate into financials amid expectations of rising net interest margins and solid regional bank earnings. This shift has provided a positive backdrop for Citigroup’s shares, which stand to benefit from renewed investor confidence in the banking sector.